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Federal Judge Blocks Overtime Rule

SHERMAN, Texas — A federal judge has blocked a Department of Labor (DOL) rule that was to take effect on Dec. 1 which raised the threshold from receiving mandatory overtime pay from $23,660 to $47,476 per year, or $455 to $913 per week.

U.S. District Judge Amos Mazzant III of the Eastern District of Texas imposed an injunction against the rule Tuesday at the request of 21 states and several business groups.

The judge said the Labor Department regulation exceeded the authority granted by Congress, which he said gave the DOL the right to define which workers are considered salaried only based on the duties they performed, not by how much they made.

By requiring employers to pay overtime wages based on salary rather than an employee’s duties, the DOL exceeded its authority under the Fair Labor Standards Act and ignored Congress’s intent, Mazzant said in his ruling. “If Congress intended the salary requirement to supplant the duties test, then Congress, and not the department, should make that change,” he said.

The White House declined to immediately comment on the ruling.

The DOL failed to consider regional salary and economic differences in setting the nationwide base pay rate, opponents said in challenging the new rule. They also complained the Obama administration disregarded the abilities of smaller public and private employers to pay higher salaries that would automatically ratchet up every three years.

What steps are next:

• The court may issue a motion for summary judgement, which could see all or parts of the rule invalidated or upheld;

• The court could proceed to schedule briefs and arguments, which would see the process extend well into 2017; or

• Congress could decide to look for a bipartisan solution in the interim, which would allow Democrats to preserve some of the increases in the DOL’s rule that removing the automatic increases which Republicans object to, and allowing for a phase-in of the increases.

Information courtesy of Heating, Air-conditioning, and Refrigeration Distributors International (HARDI). For more information, visit www.hardinet.org.

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